Evidence-Based Drug Coverage Decisions Workable

Action Points

Explain to interested patients that some U.S. government-run systems as well as private insurers currently exclude coverage of some drugs on the basis of research evidence, including data on cost-effectiveness.

Explain that this study examined how drug coverage decisions are made in Great Britain, Australia, and Canada, which all have national health systems but which differ from each other in how they are structured.

Publicly-run healthcare systems have successfully used data on comparative effectiveness and cost-effectiveness for drug therapies to make coverage decisions, said researchers who studied policies in Canada, Australia, and Great Britain.

"Perhaps the main lesson from the experience of the three countries is that systematic, durable, and widely accepted decisions can be made using comparative effectiveness and cost-effectiveness," wrote Braden Manns, MD, and Fiona Clement, PhD, of the University of Calgary in Calgary, Alberta, and colleagues.

Writing in the Oct. 7 Journal of the American Medical Association, the researchers added that these countries have also found ways to incorporate other criteria, such as clinical need for niche populations, into their coverage decisions.

Manns and colleagues said the experience of the three English-speaking nations might inform the current U.S. debate on whether and how to incorporate comparative effectiveness and cost-effectiveness data into healthcare reform.

They noted that the Medicare and Medicaid systems generally do not take cost into consideration in making coverage decisions. Partly as a result, the annual cost to taxpayers for drugs in these programs is likely to approach $1 trillion in the next five years, the researchers said.

In Canada, Australia, and Britain -- each of which have national healthcare systems, though the structures differ considerably -- government agencies perform evidence-based reviews of drugs to determine what the national systems will provide.

Canada established the Common Drug Review (CDR) in 2002 to standardize prescription drug coverage, which previously had been established by each province individually. Manufacturers file applications with the CDR, which considers safety, effectiveness, and cost-effectiveness in comparison with other available therapies.

CDR decisions are not binding on drug plans, which are still run at the provincial level, but they are followed about 90% of the time, Manns and colleagues said.

Great Britain relies on the National Institute of Health and Clinical Effectiveness (NICE) to perform similar reviews, called guidances, which are binding in England and Wales (but not in Scotland). NICE considers drugs and other therapies on its own initiative as well as responding to manufacturer submissions.

In Australia, drug coverage decisions are under the control of the Pharmaceutical Benefit Advisory Committee (PBAC), which makes recommendations to the nation's health minister. Unfavorable PBAC findings are binding, although the minister can still deny coverage for a drug recommended by the committee.

The three bodies began making records of their deliberations public earlier this decade. Manns and colleagues examined records for all drug coverage decisions made during this period, totalling 121 for the CDR, 282 for the PBAC, and 97 for NICE. Many of the NICE decisions covered multiple drugs, such that it made a total of 199 drug appraisals.

The researchers found that substantial clinical uncertainty -- that is, when safety and effectiveness data were based on nonrandomized trials or the agencies found fault with the design of randomized trials -- was common among drugs reviewed in Canada and Australia (42% and 44% of cases, respectively).

Such uncertainly was less common for drugs reviewed by NICE (27%, P=0.009), "perhaps reflecting the fact that NICE typically evaluates classes of drugs that have had regulatory approval for longer," Manns and colleagues wrote.

Uncertainty in the economic evidence was also common, the researchers found. Cost-effectiveness was typically measured in quality-adjusted life-years (QALY).

"When a cost-per-QALY estimate was required for the decision, considerable economic uncertainty existed for 46.1%, 58.2%, and 55.7% of submissions considered by NICE, PBAC, and CDR, respectively," the researchers wrote.

But in one-quarter of cases considered by the three agencies, clinical uncertainty was the sole reason for the economic uncertainty.

Approval rates were markedly higher in Britain (87%) than in Canada (50%) or Australia (54%). In the latter two countries, clinical or economic uncertainty tended to predict rejection, the researchers said.

The three agencies often disagreed. For 91 submissions to two or more of the bodies covering the same drugs for the same indications, the following kappa coefficients for agreement on funding recommendations were found:

CDR versus PBAC: 0.27

NICE versus PBAC: 0.13

CDR versus NICE: 0.55

The researchers said Canada was especially hard on "me-too" drugs for a given indication, whereas Australia tended to focus heavily on price for new agents in categories with multiple existing drug options. NICE, they said, had "an apparent intention ... to find limited niches for drugs rather than recommending not to list."

Manns and colleagues also examined the outcomes of agency reviews of three specific drugs: insulin glargine (Lantus) for diabetes, ranibizumab (Lucentis) for macular degeneration, and teriparatide (Forteo) for osteoporosis.

Insulin glargine was rejected by the CDR because of its high price. It was accepted by the PBAC only after the manufacturer revised its application four times -- and then only on condition that it drop the price. NICE approved the product for patients with type 1 diabetes and a small subset of type 2 diabetics for whom it was expected to be more effective than cheaper insulin products.

Ranibizumab was approved by all three agencies. Manns and colleagues found that the committees had each calculated that the cost-effectiveness was good -- the severe implications of blindness meant that the QALY savings were high, despite the drug's high annual cost.

All three agencies were dissatisfied with evidence backing teriparatide, because the submitted evidence relied on placebo control rather than head-to-head comparisons with bisphosphonates. Consequently, the CDR and PBAC both rejected the drug, and NICE recommended it only for patients with severe osteoporosis with inadequate responses to bisphosphonates.

Manns and colleagues said the chief lesson for the U.S. is that the very existence of these agencies "confirms that it is feasible to [consider] comparative effectiveness in pharmaceutical reimbursement decisions. The successful establishment of the CDR, which operates in an environment of multiple payers, all with varying budgets, is particularly relevant to the U.S."

The researchers also argued that the differences between agencies and their ultimate decisions is evidence that comparative and cost-effectiveness decision-making can be tailored to local circumstances.

Finally, Manns and colleagues said, the experience with ranibizumab shows that expensive drugs can gain approval even when economics are taken into account.

They suggested that the NICE approach, in which outright rejections are rare but recommendations are often limited to specific patient subgroups where the evidence for cost-effective benefit is strongest, is further proof that cost-effectiveness is not an inflexible barrier.

The Canadian Agency for Drugs and Technologies in Health funded the study. Study authors also received support from the Canadian Health Services Research Foundation, the Alberta Heritage Foundation for Medical Research, and the Canadian Institutes for Health Research.

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